Case Summary (G.R. No. 224936)
Factual Background and Subject Property
NGCP sought to expropriate a 101,290.42 sq. m. portion of land within the Petrochemical Industrial Park (Barangay Batangas II, Mariveles and Barangay Lamao, Limay, Bataan) to construct and maintain the Mariveles‑Limay 230 kV Transmission Line Project. The park’s history: originally public domain reserved under EO No. 48 (1919), partially withdrawn and declared an industrial reservation under P.P. No. 361 (1968) and P.P. No. 630 (1969), transferred to PNOC by P.D. No. 949 (1976) for development as a petrochemical industrial zone, and later expanded and made commercially usable and alienable under P.D. No. 1803 (1981) and R.A. No. 10516 (2013). PNOC organized PAFC to manage and operate the industrial zone; PAFC holds title by deed of assignment (1994) and is charged to manage the property consistent with R.A. No. 10516 and its IRR.
Procedural History in the Trial Court
NGCP filed the expropriation complaint alleging failed negotiations and necessity for its transmission project. Orica and PAFC answered, raising defenses that the land was already devoted to public use and that only Congress could exercise eminent domain over such public‑use property. The RTC overruled defendants’ objections and issued an Order of Expropriation (Feb. 11, 2016), declaring NGCP had a lawful right to take the property upon payment of just compensation and directing selection of commissioners and reception of evidence on compensation. PAFC’s motion for reconsideration was denied (Apr. 18, 2016), prompting this appeal.
Issues Presented on Appeal
The Petition framed two core issues: (1) whether PAFC properly filed a Rule 45 petition directly with the Supreme Court (i.e., whether only pure questions of law were involved); and (2) whether the RTC erred in holding NGCP empowered to expropriate the subject property under R.A. No. 9511.
Procedural Question: Appropriateness of Direct Supreme Court Review
The Court examined Rule 67, Section 4 and Rule 45 and reiterated that a final order sustaining the right to expropriate is appealable. While PAFC titled its filing as a petition for certiorari, the Court treated it as a petition for review under Rule 45. The Court applied the test for questions of law versus fact (Briones v. People): a question of law is one that can be resolved by applying legal principles to an established set of facts without reassessing the probative value of evidence. PAFC’s central contention — that NGCP’s delegated eminent domain power did not permit expropriation of property already devoted to public use absent direct congressional action or a specific grant — was characterized as a pure question of law. Accordingly, filing directly under Rule 45 was proper.
Legal Framework: Nature and Source of Eminent Domain Power
The Court summarized the constitutional and statutory framework: eminent domain is an inherent sovereign power but is subject to constitutional limitation (Article III, Section 9, 1987 Constitution). Although the legislature primarily wields the power and may exercise it directly, it may delegate eminent domain authority to government agencies, municipal corporations, quasi‑public entities, and grantees under franchise statutes. Such delegated power is not inherent to private entities and must be exercised strictly within the scope and limits of the delegating statute.
Statutory Limitations in R.A. No. 9511
Section 4 of R.A. No. 9511 expressly authorizes NGCP to exercise eminent domain only with respect to private property “actually necessary” for construction, expansion, maintenance, and efficient operation of the transmission system and subtransmission systems, and requires observance of applicable eminent domain law and prerequisites (taking of possession, determination and payment of just compensation). The Court applied the plain‑meaning rule: because the statute is clear and unambiguous, NGCP’s power under R.A. No. 9511 is limited to private property.
Distinction Between Public Domain and Patrimonial (Private) Property
The Court recited Civil Code distinctions: lands of public dominion (public use, public service, or for development of national wealth) are outside the commerce of man and inalienable; patrimonial property is held by the State in a private/proprietary capacity and is alienable and disposable. Conversion from public dominion to patrimonial property occurs upon an express declaration of alienability and disposability, after which the property becomes subject to private rights, prescription, and registration. The Court stressed that mere State ownership does not automatically mean public dominion; characterization depends on statutory designation and the use/management (sovereign vs proprietary).
Characterization of the Subject Property as Patrimonial (Private) Property
Applying the foregoing, the Court concluded the subject property within the Petrochemical Industrial Park is patrimonial property that assumes the nature of private property. The laws governing the park (P.D. No. 949 as amended by R.A. No. 10516 and the IRR) explicitly contemplated management, development, and commercial utilization of the land, including leasing, sale, and conveyance to private entities for petrochemical, energy‑related, and other commercially oriented activities. The statutes and IRR described the estate as an industrial and commercial estate encouraging private investment; these provisions effectuate conversion away from inalienable public dominion toward patrimonial, alienable, and disposable property. Consequently, the land is within the class of property
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Case Caption, Docket and Decision
- G.R. No. 224936; Decision promulgated September 04, 2019 by the Supreme Court, Second Division; penned by Justice Caguioa.
- Petition filed by PNOC Alternative Fuels Corporation (petitioner PAFC) against National Grid Corporation of the Philippines (respondent NGCP).
- Appeal brought via an instrument labeled a "Petition for Certiorari" under Rule 45 of the Rules of Court; Court treats the filing as a petition for review on certiorari under Rule 45.
- RTC of Mariveles, Bataan, Branch 4 issued an Order of Expropriation dated February 11, 2016 (assailed Order), later denied PAFC's motion for reconsideration in Order dated April 18, 2016.
- Final disposition: Supreme Court DENIED the appeal and AFFIRMED the RTC Order dated February 11, 2016. Justices Carpio (Chairperson), Reyes, Jr., Lazaro-Javier, and Zalameda concurred.
Antecedent Proceedings and Lower Court Ruling
- Respondent NGCP filed a Complaint for Expropriation on February 9, 2011 in SCA Case No. 104-ML (National Grid Corporation of the Philippines v. PNOC Alternative Fuels Corporation, et al.).
- Complaint named as defendants: PNOC Alternative Fuels Corporation (then PNOC Petrochemicals Development Corporation), Orica Philippines, Inc., Edgardo P. Manieda, Winy P. Manieda, Mercedes P. Manieda, Nemy Manieda Amado, Danilo P. Manieda, the Heirs of Leonardo Serios, and Cresencia Toribio Soriano (represented by Imelda S. Villareal).
- RTC denied PAFC and Orica’s objections and defenses, declared NGCP has a lawful right to expropriate upon payment of just compensation, directed parties to submit names of three commissioners for appointment by the court, and set the case for reception of evidence to establish defendants' valid claim of ownership for just compensation.
- RTC reasoning included statement that property already devoted to public use is not invulnerable to expropriation and referenced Justice Isagani Cruz's view on expropriation of property devoted to public use when done directly by legislature or under a specific grant of authority.
- PAFC’s motion for reconsideration was denied by the RTC on April 18, 2016.
The Subject Property, Its History and Current Characterization
- Subject property: certain area of a parcel situated in Barangay Batangas II, Mariveles, Bataan and Barangay Lamao, Limay, Bataan, totaling 101,290.42 square meters, more or less; part of the Petrochemical Industrial Park.
- Historical chain of public acts concerning the parcel:
- Executive Order No. 48 (series 1919): reserved approximate 621 hectares for Lamao Horticultural Experiment Station.
- Presidential Proclamation No. 361 (1968): withdrew 418 hectares from E.O. No. 48 and declared the same an industrial reservation to be administered by National Power Corporation (NPC).
- Presidential Proclamation No. 630 (1969): amended and enlarged the area reserved by P.P. No. 361 for industrial purposes and for an industrial estate under NDC or a subsidiary.
- Presidential Decree No. 949 (1976): transferred administration, management and ownership of the Lamao parcel (covered by PP 361, as amended) to Philippine National Oil Company (PNOC), directing PNOC to manage, operate and develop the parcel as a petrochemical industrial zone and to establish, develop and operate petrochemical and related industries, by itself or its subsidiaries or other entities; authorized PNOC to lease, sell and/or convey portions where private entities operate petrochemical industry.
- Presidential Decree No. 1803 (1981): enlarged the area reserved for the Petrochemical Industrial Zone.
- PNOC organized PNOC Petrochemicals Development Corporation (PPDC) in 1993 as subsidiary to administer and operate the Petrochemical Industrial Zone; PPDC later changed name to PNOC Alternative Fuels Corporation (PAFC) by amendment in 2006.
- Republic Act No. 10516 (2013): expanded permitted uses of the Petrochemical Industrial Park to include businesses engaged in energy, energy-allied activities, energy-related infrastructure projects, and other activities promoting best economic use; enabled lease, sale, and conveyance for commercial utilization by private investors.
- Department of Energy Department Circular No. DC2013-06-0011 (June 6, 2013): Implementing Rules and Regulations (IRR) of R.A. No. 10516; stated PNOC assigned ownership to PAFC via Deed of Assignment dated August 11, 1994 and mandated PAFC to manage, operate and develop property per R.A. No. 10516 and its IRR.
- The laws and IRR describe the Petrochemical Industrial Park as an industrial and commercial estate encouraging private sector investment and allowing transfer of portions to private entities; the IRR characterizes allowable activities broadly, including activities “regularly engaged in as a means of livelihood or with a view to profit.”
Parties’ Pleadings and Positions
- Respondent NGCP:
- Claimed it is a private corporation engaged in transmitting electric power; granted a legislative franchise under R.A. No. 9511 to operate, manage and maintain an interconnected transmission system and given authority to construct, install, finance, manage, improve, expand, operate, maintain, rehabilitate, repair and refurbish the nationwide transmission system.
- Sought to expropriate the subject property to construct and maintain the Mariveles-Limay 230 kV Transmission Line Project; alleged negotiations failed and proposed alternative route by PAFC was technically unsound.
- Invoked Section 4 of R.A. No. 9511 as authority to exercise eminent domain insofar as reasonably necessary for transmission system construction and operation and to acquire private property necessary for the franchise’s purposes.
- Alleged necessity and urgency of the project to ensure stability and reliability of power supply in Bataan and Zambales and future areas.
- Petitioner PAFC:
- Argued several statutes and issuances limit NGCP's right to expropriate; argued the land is already devoted to a public purpose (development of petrochemical and related industries) essential to national interest and therefore not subject to NGCP’s delegated power under R.A. No. 9511; asserted that only the Congress of the Philippines has power to exercise eminent domain over the subject property.
- Denied procedural posture by arguing direct recourse to Supreme Court was appropriate as pure question of law (invoked Rule 45).
- Orica Philippines, Inc.:
- Alleged it was lessee of a portion of the Petrochemical Industrial Park; put up manufacturing plant producing commercial blasting explosives and initiating systems products; raised special affirmative defenses to NGCP’s Complaint.
- Tripartite Agreement (August 17, 2012):
- Parties acknowledged it was necessary for NGCP to establish the Mariveles-Limay 230 kV Transmission Line Project due to increased electricity demand in Bataan and Zambales; parties’ technical teams agreed on a revised, safe and viable route taking into account Orica’s safety and security concerns.
Issues Presented to the Supreme Court
- Procedural Issue:
- Whether petitioner PAFC was correct in filing its appeal directly before the Supreme Court via a Rule 45 petition (styled as a Petition for Certiorari) instead of filing an appeal to the Court of Appeals.
- Substantive Issue:
- Whether the RTC was correct in issuing the Order of Expropriation, i.e., whether NGCP is empowered under R.A. No. 9511 to expropriate the subject property.
Court’s Ruling on Procedural Issue (Appealability and Proper Forum)
- Rule 67, Section 4 of the Rules of Court permits an appeal from an order of expropriation; a final order sustaining right to expropriate may be appealed by any aggrieved party, and such appeal does not prevent the court from determining just compensation.
- The proper remedy to contest an order of expropriation is an appeal of that order, not a certiorari petition alleging grave abuse of discretion.
- The Supreme Court held the petition, though misnamed "Petition for Certiorari," is for all int